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TMI Blog1992 (10) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... uble taxation ? Assessment years 1960-61 and 1961-62 (1) Whether, on the facts and in the circumstances of the case, the dividend earned from the trust-company was exempt under the provisions of sub-clause (iii) of section 2(6A)(e) of the Indian Income-tax Act, 1922 ? (2) If the answer to question No. 1 above is in the negative, is the said dividend exempt on the ground of double taxation Assessment years 1962-63 to 1968-69 (1) Whether, on the facts and in the circumstances of the case, the dividend earned from the trust-company was exempt under the provisions of section 2(22)(e) of the Income-tax Act, 1961 ? (2) If the answer to question No. 1 above is in the negative, is the said dividend exempt on the ground of double taxation ? The assessee is a private limited company controlled by the members of the family of the late Shri Walchand Hirachand. The assessee-company's main business is the management of other companies which belong to the same group. The accounting years adopted by the assessee-company are the financial years immediately preceding the year of assessment. The assessee held shares, inter alia, in Messrs. Share Investment Trust Private Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat extent actually paid and earned in subsequent years should be exempted from tax. Though the assessee pressed into service sub-clause (iii) of section 2(6A)(e) of the Indian Income-tax Act, 1922, and sub-clause (iii) of section 2(22)(e) of the Income-tax Act, 1961, for claiming exemption from taxation in respect of dividend earned during the aforesaid ten years, this claim was not accepted by the Tribunal. The Tribunal contrasted the provisions of section 2(22)(e) of the Income-tax Act, 1961, with the provisions of section 2(6A)(e) of the Indian Income-tax Act, 1922, and found that these subsections were almost identical and the exemption available in sub-clause (iii) of section 2(6A)(e) of the Indian Income-tax Act, 1922, was also available under section 2(22)(e) of the Income-tax Act, 1961. Construing the provisions of the two corresponding sections under the 1922 and 1961 Acts, the Tribunal took the view that the provisions of law were clear and unambiguous and that the assessee could get the benefit of exemption only if its case fell squarely within the wording of the sub-section. The assessee did not dispute that its case was not covered by the exemption provided in sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mehta made an attempt to persuade us to answer the question in favour of the assessee by invoking the general principle adopted in income-tax law that the same income cannot be subjected to taxation more than once. He relied for this proposition on the judgment of the Supreme Court in Laxmipat Singhania v. CIT [1969] 72 ITR 291 , wherein the Supreme Court has pointed out that it is fundamental rule of the law of taxation that, unless otherwise expressly provided, the same income cannot be taxed twice. It is obvious that, from the guarded way in which the proposition has been laid down, if the legislative intent is clear, even if it amounts to double taxation, there is no absolute bar or prohibition against it. The judgment of the Supreme Court in P. K. Badiani v. CIT [1976] 105 ITR 642 was also relied upon by the learned advocate for the assessee. In our view, there is nothing in this judgment which would help the assessee's case. The judgment of the Delhi High Court in CIT v. R. Dalmia [1982] 135 ITR 346 , was cited at the Bar on behalf of the assessee also with regard to the general proposition of law that a statute should be construed in such a manner as not to le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They are required to be fully complied with and, in the instant case, they could not be complied with and were not complied with. If that be so, the exclusion of the dividends from the income of the assessee for these three years as well as for the earlier year was neither permissible nor possible. In our view, in principle, there is no difference between the case of the assessee before us and Badiani's case [1985] 154 ITR 204 (Bom). In the present case also, the assessee had taken the loan on September 10, 1957, and repaid it fully on October 26, 1957. It is thus clear that the amount of loan/advance had been fully repaid before the dividend was declared by the trust-company and that, therefore, it was not possible to invoke the exclusion provision in sub-clause (iii) of section 2(6A)(e). Indeed, it was rightly not invoked by the learned advocate appearing for the assessee. Is it then permissible for the court, by relying on the general principle for interpretation of tax statutes, to hold that, inasmuch as there is likelihood of double taxation of the assessee, the assessee must be given relief ? We are afraid that it is not permissible for us to do so. The Legisla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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